UK -Chinese relations continue to deteriorate creating a downbeat tone. Dominic Raab has hinted that the UK will withdraw from the extradition treaty with Hong Kong, risking a wider fallout with China. The move comes as Huawei will be banned from the UK’s 5G network and among the possibility of sanctions over human rights violations. The Chinese ambassador to London said that the UK was bowing the US pressure.
Rising coronavirius numbers particularly in the US where numbers have toped 3.7 million, are weighing on risk sentiment. Los Angeles is expected to re-impose lockdown whilst cases in Florida have been described as out of control. As new daily cases remain above 70,000 fears are growing that the frugal economic recovery will be undermined. Evidence of the impact of rising covid numbers was reflected in US consumer confidence numbers on Friday which unexpectedly dropped sharply lower in July.
With little on the economic calendar to keep investors entertained today, stimulus talk on both sides of the Atlantic and potentially vaccine news, as Oxford University and AstraZeneca are due to update on the Phase 3 trials, could drive sentiment and the market.
M&S to cut jobs
In corporate news Marks and Spencer is set to announce hundreds of job losses over the coming week. The high street retailer was already struggling prior to coronavirus lockdown as it failed to turn around its flagging clothing department. Lockdown will have accelerated the downwards slippery slope. The tie up with Ocado to boost food sales surely can’t come soon enough, this could at least go some way to offsetting poor clothing business performance.